TAMPA, December 1, 2012 ― President Obama and the Democrats were successful in 2012 largely on the strength of some rather outlandish demagoguery. “Billionaires pay fewer taxes than their secretaries” was one slogan that was particularly successful.
The Obama campaign successfully made an issue out of Mitt Romney’s taxes, finally getting Romney to admit that he paid around 13% of his earnings in taxes over the past several years. The “fair share” crowd contrasted this with the higher percentage that would have been paid by a secretary in the 28% bracket, for example, who would still pay more than 13% even after deductions.
That Americans bought this specious argument is more worrisome than that the Democrats made it.
Romney’s tax percentage was low because most of earnings came from capital gains, not income. Capital gains are just what they sound like. They are the appreciation in the value of one’s capital. If you buy a stock at $5 per share and its price goes up to $7 dollars per share, you have realized $2 in capital gains. If you sell that stock at a $2 dollar profit, the government wants a percentage.
Right now, Mitt Romney would pay 35% income tax and 15% on capital gains. The average secretary would pay 15% income tax and 15% on capital gains. So, Romney’s tax liability as a percentage of income is more than double the average secretary’s. His tax liability on capital gains is the same. Obviously, Romney’s nominal tax payments in both categories would exceed the secretary’s by orders of magnitude.
That’s how things actually are out here in the real world.
So why is the tax rate on capital gains lower than on income? Because “capital,” by definition, comes from previously taxed income.
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TAMPA, November 8, 2012 – “We’re all socialists now.”
TAMPA, November 4, 2012 – “Remember, remember the 5th of November.”
TAMPA, November 2, 2012 – It wasn’t so long ago that the following statement could only appear in a dystopian novel or movie script:
TAMPA, October 28, 2012 – Nine days before Election Day, Americans are hunkering down into their traditional Republican/Democratic camps. Supposedly, the future of American society rests upon which corporate-backed candidate wins the presidency. Americans of the past would have regarded this as complete nonsense.
TAMPA, October 26, 2012 – Many people think of libertarianism as a subset of conservatism, but that’s not true. Libertarianism and conservatism are completely separate philosophies with distinct and separate philosophical traditions. The philosophical differences result in very different positions on issues, from domestic to foreign policy. Their differences on the welfare state provide a perfect example.
TAMPA, October 18, 2012 – Mitt Romney has been able to cruise through two debates with Barack Obama by utilizing a surprising strategy. When Obama has gone on the attack, citing the “draconian cuts” that the delusional on both sides of the aisle imagine Romney would propose as president, Romney has completely defused the president by simply telling the truth.
TAMPA, October 16, 2012 – Tonight, we will be subjected to another presidential “debate,” in which two candidates who agree that government is the solution to everything argue about whose central plan is better. With the questions coming directly from the electorate and super-liberal Candy Crowley deciding which ones to ask, there is not much chance that big government will be challenged by anyone.
TAMPA, October 5, 2012 – The first presidential debate between Mitt Romney and Barack Obama was staged by professional television producers. The podiums were positioned such that they were turned three quarters toward each other but still facing the cameras and just the right distance apart to make for a good wide shot of the two candidates.
TAMPA, October 4, 2012 — The early consensus after last night’s debate between President Obama and Republican presidential nominee Mitt Romney is that it was a win for Romney. That depends upon how you define “win.”
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